Loans and Lines of Credit are now available to Condominium Associations (and HOAs) as a great financing alternative to abrupt assessments that often financially squeeze condo owners. 

Rates for condo association loans are competitive; around 7%, which makes an association loan a very attractive alternative.  (This rate may be more or less depending on the creditworthiness of the condo association)

Take the case of a $1 million dollar project.  If the condo association has 100 units, an up-front assessment may cost each owner in the ballpark of $10,000, which will most likely burden the owners.

On the other hand, if the condo association is to take out a loan on $1 million at 7%, this would roughly cost the condo association $5,833 per month or $58.33 to each unit owner per month, which may alleviate a lot of headaches for condo association members. 

The condo association may either raise condo fees to absorb this less burdensome, easier cost or may decide to pay of the association loan in full at some point or paydown a substantial percentage of the loan.  For example, maybe a mini-assessment every year towards paying down the loan.

Association lenders will use the right of assessment as collateral for the loan.  Associations that may qualify for this specialized loan include condo, timeshare and community associations, along with co-ops.

Condo association loans can certainly ease the pain that condo owners usually feel with hard-hitting assessments.